This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If a license to trade with the enemy by the department of the government which has authority to grant such license is granted, contracts with the enemy which are entered into under such license are valid.1 Licenses of this sort are construed liberally,2 but at the same time substantial performance is necessary.3 A license may be given in general terms or by fair implication, as well as given in specific terms to a definite individual.4 The fact that the United States mail service was continued between the states which adhered to the Union and certain of the Southern states after the President's proclamation of the blockade of the ports of seceding states, together with the fact that at a subsequent time commercial intercourse between such states was expressly forbidden, shows by fair implication that up to the later proclamation commercial intercourse between such states was authorized.5 A license given to a specific individual is ordinarily personal, and it is therefore non-assignable unless made so by its express terms.6 If a license to trade with the enemy includes authority to transport property to the country of the enemy and to bring property back therefrom, it ordinarily protects the property of the enemy which is transported under such license from condemnation as prize, by the government which issues such license.7 A license which is not given by competent authority is invalid,8 even though action has been taken in reliance upon the validity of such license to the detriment of the parties who have thus acted. While a license renders treating with the enemy lawful as between the government which issues such license and the party to whom it is issued, it has, of course, no effect upon the legality of such treating as between the parties to whom the license is issued and the enemy.9
12 Kelson v. Trigg, 3 Tenn. Cas. 733.
13 Nelson v. Trigg, 3 Tenn. Cas. 733.
14 Williams v. Gay, 21 La. Ann 110; Haney v. Manning, 21 La. Ann. 166; Irwin v. Levy, 24 La. Ann. 302; Rhodes v. Summerville, 51 Tenn. (4 Heisk ) 204.
15 Irwin v Levy, 24 La. Ann. 302. 16 Rhodes v. Summerville, 51 Tenn. (4 Heisk.) 204.
17 Haney v. Manning, 21 La. Ann. 166.
18 Williams v. Gay, 21 La. Ann. 110; Haney v. Manning, 21 La. Ann. 166.
19 Montgomery v. United States, 82 U. S. (15 Wall.) 395, 21 L. ed. 97.
20 United States v. Grossmayer, 76 U. S. (9 Wall.) 72. 19 L. ed. 627; United States v. Lapene, 84 U. S. (17 Wall.) 602, 21 L. ed. 693; Hubbard v. Matthews, 54 X. Y. 43, 13 Am. Rep. 502.
21 Small's Administrator v. Lumpkin's Administrator, 69 Va. (28 Gratt.) 832.
1Feise v. Bell, 4 Taunt. 4 (question of construction of license); Flindt v. Scott, 5 Taunt. 674; Hamilton v. Dillin, 88 U. S. (21 Wall.) 73, 22 L. ed. 528.
"A state of war may exist, and yet commercial intercourse be lawful. They are not necessarily inconsistent with each other. Trading with a public enemy may be authorized by the sovereign, and even to a limited extent by a military commander. Such permissions or licenses are partial suspensions of the laws of war, but not of the war itself. In modern times they are very common. Bynkershoek, in his Quaest. Jur. Pub., lib. 1, c. 3, while asserting as a universal principle of law that an immediate consequence of the commencement of war is the interdiction of all commercial intercourse between the subjects of the states at war, remarks: 'The utility, however, of merchants, and the mutual wants of nations, have almost got the better of the laws of war as to commerce. Hence it is alternatively permitted and forbidden in time of war, as princes think it most for the interests of their subjects. A commercial nation is anxious to trade, and accommodates the laws of war to the greater or lesser want that it may be in of the goods of others. Thus sometimes a mutual commerce is permitted generally; sometimes as to certain merchandise only, while others are prohibited; and sometimes it is prohibited altogether.' Halleck, in his Treatise on the Laws of War,' pages 676 et seq., discusses this subject at considerable length, and remarks: 'That branch of the government to which, from the form of its constitution, the power of declaring or making war is intrusted, has an undoubted right to regulate and modify, in its discretion, the hostilities which it sanctions. * * * In England, licenses are granted directly by the crown, or by some subordinate officer to whom the authority of the crown has been delegated either by special instructions or under an act of parliament. In the United States, as a general rule, licenses are issued under the authority of an act of Congress; but in special cases and for purposes immediately connected with the prosecution of the war, they may be granted by the authority of the President, as commander-in-chief of the military and naval forces of the United States," Matthews v. McStea, 91 U. S. 7, 23 L. ed. 188.
2 Flindt v. Scott, 5 Taunt. 674. "These licenses to trade, however they may have been formerly construed strictly, are now in all courts construed more liberally and favorably to trade, in order to effectuate the benefits intended to result from them." Flindt v. Scott, 5 Taunt. 674.
3 Williams v. Marshall, 6 Taunt. 390; Camelo v. Britten, 4 B. & Ald. 184.
4 Matthews v. McStea, 91 U. S. 7, 23 L. ed. 188.
5Matthews v. McStea, 91 U. S. 7, 23 L. ed. 188.
"It being, then, settled that a war may exist, and yet that trading with the enemy, or commercial intercourse, may be allowable, we are brought to inquire whether such intercourse was allowed between the loyal citizens of the United States and the citizens of Louisiana until the 23rd of April, 1861, when the acceptance was made upon which this suit was brought. And, in determining this, the character of the war and the manner in which it was commenced ought not to be overlooked. No declaration of war was ever made. The President recognized its existence by proclaiming a blockade on the 10th of April; and it then became his duty as well as his right to direct how it should be carried on. In the exercise of this right he was at liberty to allow or license intercourse, and his proclamations, if they did not license it, expressly did, in our opinion, license it by very cogent implications. It is impossible to read them without a conviction that no interdiction of commercial intercourse, except through the ports of the designated states, was intended. The first was that of April 15, 1861. The forts and property of the United States had, prior to that day, been forcibly seized by armed forces. Hostilities had commenced, and, in the light of subsequent events, it must be considered that a state of war then existed. Yet the proclamation, while callng for the militia of the several states and stating what would probably be the first services assigned to them, expressly declared that, 4in every event, the utmost care would be observed, consistently with the repossession of the forts, places and property which had been seized from the union, to avoid any devastation, destruction of or interference with property or any disturbance of peaceful citizens in any part of the country.' Manifestly this declaration was not a mere military order. It did not contemplate the treatment of the inhabitants of the states in which the unlawful combinations mentioned in the proclamation existed as public enemies. It announced a different mode of treatment - the treatment due to friends. It is to be observed that the proclamation of April 15, 1861, was not a distinct recognition of an existing state of war. The President had power to recognize it, The Prize Cases (2 Black, 636); but he did not prior to his second proclamation, that of April 10th, in which he announced the blockade. Even then the war was only in-ferentially recognized; and the measures proposed were avowed to be with a view to * * * the protection of the public peace and the lives and property of quiet and orderly citizens pursuing their lawful occupations, until Congress shall have assembled' The reference here was plainly to citizens of the insurrectionary states; and the purpose avowed appears to be inconsistent with their being regarded as public enemies, and consequently debarred from intercourse with the inhabitants of states not in insurrection. The only interference with the business relations of citizens in all parts of the country, contemplated by the proclamation, seems to have been such as the blockade might cause. And that It was understood to be an assent by the executive to continue business intercourse may be inferred from the subsequent action of the government (of which we may take judicial notice) in continuing the mail service in Louisiana and the other insurrectionary states long after the blockade was declared. If it was not such an assent or permission, it was well fitted to deceive the public* But in a civil more than in a foreign war, or a war declared, it is important that unequivocal notice should be given of the illegality of traffic or commercial intercourse; for, in a civil war, only the government can know when the insurrection has assumed the character of war." Matthews v. McStea, 91 U. S. 7, 23 L. ed. 188.